The mayor has refused to sign the council’s financial statements for last year, citing a $7.5million budget blowout. As a result, the council has missed its deadline to file its returns with the NSW Division of Local Government.

‘‘I can’t really do anything with the history of what happened before our time, but I want to make sure going forward that we don’t make the same mistakes,’’ Cr McCloy said.

Meanwhile, councillors traded barbs over the mayor’s voicemail and Cr Dunn’s subsequent code-of-conduct complaint. A Herald online poll on the stoush attracted more than 2650 responses before it closed.

Cr McCloy was unrepentant about the phone message: ‘‘I had good reason for saying to Cr Dunn what I said. I won’t change who I am, I’ll defend myself.’’

Council sparring on 'petty issues'

NEWCASTLE City Council's operating deficit topped $20 million last year, and new lord mayor Jeff McCloy has refused to sign the audited financial statements until he receives answers about the budget blowout.

Several of the questions relate to why the net operating deficit is $7.5 million worse than budgeted.

The financial statements were due to be tabled with the NSW Division of Local Government on November 7, but the council has now asked for an extension because of the delay. Under the Local Government Act, a council has four months from the end of the financial year to present its financial statements to the division, unless an extension is granted.

Cr McCloy said yesterday the figures were presented for his signature "as a fait accompli".

"It's one hell of a loss," he said. "I can't really do anything with the history of what happened before our time, but I want to make sure going forward that we don't make the same mistakes.

"We lost $20 million last year, $20 million the year before, nothing seems to have changed and it's not good enough."

In his email, Cr McCloy asked why employee benefits and associated costs exceeded the budget by more than $3 million.

It comes after he spoke out about a desire to trim council and outsource projects.

Cr McCloy also queried "wide variations" in the expenses for the City Assets and City Engagement divisions of the council, and why a statement of cash flows "appears to be incomplete".

"It is clear that the financial plan [for the current year] is already under pressure and it is essential that councillors are fully briefed on how the problems have arisen, what steps have been taken to address the problems, and what additional actions need to be taken," Cr McCloy's email said.

Council general manager Phil Pearce moved last month to cut casual jobs and said the council would not replace departing employees, after revealing it was about $3 million in deficit for the first three months of 2012-13.

Councillors will be briefed on the situation on Tuesday.

The council said figures in Cr McCloy's email "did not correlate" with its own figures, but did not elaborate.